Rithm Capital Eyes M&A Amid Mortgage Industry Shift
Deal News | Apr 25, 2025 | EIN
Rithm Capital, the parent company of Newrez, is actively exploring mergers and acquisitions in the mortgage and asset management sectors but remains committed to maintaining its earnings performance. Despite the consolidation wave in the mortgage industry, highlighted by Rocket Companies' acquisition of Mr. Cooper Group, Rithm insists on not sacrificing earnings for growth. Recently, Rithm completed several acquisitions, including $1.4 billion in consumer loans from Goldman Sachs, a $720 million deal for Sculptor Capital Management, and an acquisition of Computershare Mortgage Services. For Q1 2025, the firm reported a net income of $80.7 million, a decline from the previous quarter. Newrez's president, Baron Silverstein, sees potential in subservicing opportunities, while the entire company is focused on capital structure optimization to enhance shareholder value. Analysts at BTIG suggest Rithm's valuation risk is limited, with potential upside, including possibilities of spinning out Newrez.
Sectors
- Mortgage Banking
- Asset Management
- Financial Services
Geography
- United States – Rithm Capital, headquartered in New York, operates and executes M&A activities primarily in the U.S.
Industry
- Mortgage Banking – Rithm Capital's active involvement in the mortgage lending and servicing sector highlights Mortgage Banking as a central industry focus.
- Asset Management – The acquisition of Sculptor Capital Management and exploration of M&A opportunities in asset management affirm the sector's relevance.
- Financial Services – The overarching financial transactions and capital management strategies align with the broader Financial Services industry.
Financials
- $80.7 million – Rithm's net income for Q1 2025.
- $36.5 million – Rithm's GAAP net income for Q1 2025.
- $1.4 billion – Rithm's acquisition of consumer loans from Goldman Sachs in 2023.
- $720 million – Rithm's purchase price for Sculptor Capital Management.
- $5.5 billion – Newrez's equity investment figure leading to a 19% pretax return.
- $11.8 billion – Newrez's funded loan volume for Q1 2025.
- $845 billion – Growth in Newrez's servicing portfolio in unpaid principal balance.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Rithm Capital | Parent Company | Company | Parent company of Newrez, involved in active M&A strategies and financial management. |
| Newrez | Mortgage Platform | Company | Rithm's mortgage lending branch, involved in significant equity and servicing activities. |
| Rocket Companies | Industry Peer | Company | Involved in notable acquisition of Mr. Cooper Group, influencing industry dynamics. |
| Mr. Cooper Group | Acquired Entity | Company | Recently acquired by Rocket Companies, impacting consolidation trends in the mortgage industry. |
| Goldman Sachs | Vendor | Company | Sold $1.4 billion in consumer loans to Rithm. |
| Sculptor Capital Management | Acquired Entity | Company | Acquired by Rithm as part of their M&A strategy. |
| Computershare Mortgage Services | Acquired Entity | Company | Part of Rithm's acquisition strategy, with a focus on mortgage services. |
| BTIG | Analyst | Company | Provided analysis suggesting limited valuation downside risk for Rithm. |
| Michael Nierenberg | Chairman, CEO, President | Person | Executive leading Rithm Capital, focused on strategic and financial growth. |
| Baron Silverstein | President of Newrez | Person | Oversees Newrez operations, focusing on subservicing and refinance strategies. |